While the finance ministry is keen on divesting 10-per cent stake in Indian Oil Corporation (IOC), the petroleum ministry is of the view that market conditions are not right at this juncture for going ahead.

The government has a 78.92-per cent stake in the country's largest oil refiner.

Minister of petroleum and natural gas M Veerappa Moily said here on Feiday that disinvestment of IOC will take place only when market conditions are favourable.

'We don't
want to go to the
market where we are
not going to get the
right price,' said petroleum minister M Veerappa Moily

"Right now they are not favourable. We understand the concern of the finance ministry to meet its target for disinvestment, but it also depends on the market behaving properly," he said here.

Investors at promotional roadshows in the US, the UK and Singapore have questioned the timing of the stake sale as there is no clear road map yet to address the lingering fuel subsidy issue.

Moily, however, said that the decision about timing of the disinvestment would be taken by his ministry and the ministry of finance together after due consultations.

"It (disinvestment) will happen at appropriate time. IOC today is India's number one company and I don't want that kind of credibility and stability of IOC to be shaken," he added.

The finance ministry has asked bankers to fix domestic road shows for the IOC stake offer on December 18 and 19 so that the disinvestment can take place in January.

The finance ministry had earlier wanted to push through IOC stake sale in November itself so that it could pave the way for disinvestment of other oil sector public sector undertakings like Engineers India.

Petroleum ministry officials are of the view the finance ministry is hurrying the stake sale at a time when there are numerous overhangs given the high subsidy and lack of clarity on whether export parity pricing or import parity pricing will be used to value the products of the oil companies.

"Big investors are still in wait-and-watch mode," a senior official said. IOC chairman R.S. Butola had written to the petroleum ministry in September saying, "Current share price of IOC, already undervalued, may not fetch the fair value in the prevailing uncertain environment and investors in all probability are likely to factor in huge discount in their assessment of share price."